Everyone’s long-term financial goal should be putting money aside for the family, enough for their brethren to not only go to college but perhaps even buy their own home. Even better- if you can find investments that will pay off in dividends over time, and keep your children safe.
Basically, if you have the means to do so, the goal should always move beyond simply surviving, and building a viable nest egg. If you’re curious to know more about multi-generational planning, then the following article is for you.
Small Details
Multi-generational planning involves basically the entire family, and it is a process wherein you are ensuring that you pass your wealth on to future generations but in the most efficient way possible. There are small details you need to take care of so that the family can enjoy the maximum benefits from your estate for years down the road. You would want the future family members in your car to accumulate enough money for college savings, daily household budgeting that would protect them from the financial stresses incurred by emergencies, and even be able to set up solid retirement funds.
It is actually more helpful for you to involve the whole family in this process to better understand their needs and the different ways they would like to be involved in the family business as well as the unfolding of the legacy. There are a lot of details to balance and keep in mind, and it’s never easy to get the values and goals of your family to see eye to eye with your business goals. So, it’s important to consider a few of these details as you begin to think about a multi-generational financial plan.
What the Plans Include
Meaningful estate planning for the next generation – and the one after that – is a multi-layered plan that encompasses a great deal. You will have to work with an experienced financial manager and perhaps consult with tax attorneys to make sure that you have your bases covered.
The plan for your family’s legacy would include proper tax planning – which is especially vital when considering that you are trying to stretch your financial resources and ensure that they aren’t depleted too quickly – estate planning so that your children don’t get into any nasty fights about inheritance, and wealth planning. The latter encompasses both abiding by tax laws in a way that won’t impinge upon your wealth, as well as making a smart investment that will help the money snowball for generations. To be specific regarding taxes, the strategy also thinks of tax-minimization tools, and liquidity planning to be on the safe side. You should also think about the kinds of charities you would like your family to be involved with for decades to come, and ask your financial manager to formulate smart strategies around that.
Building a Legacy
Building a legacy that your children can benefit from is no easy feat. It’s already mentioned a bit in the points above but the thing that sets apart a robust plan for multigenerational finances from a simple estate plan is that you are being mindful of building a long-term legacy for the family and your business. It will show people how you will be remembered for years to come, so it is important to plan wisely.
Finally, any wealth management plan needs to be flexible enough to fit changing circumstances. Since you are supposed to build something to last for generations, the financial plan should be durable yet malleable enough to meet new challenges your family may face later on.
I was very glad to read this article. I have done some planning , but not enough. I have established 529 plans for my grandchildren and continue to add to them .